Santosh Kumar (C.A) (72 Points)
10 January 2011Hi to all,
We are dealing in the milk related products , and the min problem here is that , the branches pay a lumpsum amount to a distributor , who inturn distributes i t to the suppliers of milk i.e the farmers , and now whether that 3,00,000/- amount paid to distributor in lieu of the farmers is a allowed or disallowed exp,, and in that payment to farmers a detailed division is given of which the amounts are more than 20k so kindly clarify
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 10 January 2011
distributors may have paid to farmers ( assumed that farmers dont have bank account numbers and distributor is forced to pay in cash) but between company and distributor there is no such bar or precondition to pay in cash , company can pay through banking system to distributor for onward payment to farmers by cash or cheque, many farmers have bank accounts and if payment id directly credited to banks ( avoiding cheque systesm) then they accept it gladly.
CAclubindia
